Legislator Calls on Japan to Open up Cash for Clunkers Program to American-Made Cars
Rep. Betty Sutton, D-Ohio, introduced a resolution (H. Res. 997) on Jan. 5 that calls for the U.S. Trade Representative (USTR) to initiate a dispute under the World Trade Organization (WTO) if Japan does not change its cash for clunkers program to permit U.S. nameplate automakers to participate. Citing the fact that U.S. nameplate vehicles do not qualify for purchase under the Japanese version of cash for clunkers, known as the "Eco-Friendly Vehicle Purchase Program," the resolution calls on the USTR to initiate discussions with the Japanese government aimed at remedying the problem. If those discussions are not successful, Rep. Sutton is pushing the USTR to file "appropriate measures and complaints to initiate dispute resolution actions under authority of the WTO."
Rep. Sutton cites the fact that the U.S. cash for clunkers program, of which she was the main author, had been open to imports specifically because of complaints by the Japanese automakers and concerns that a program limited to only U.S.-based manufacturers would violate WTO rules. In December, assistant USTR Wendy Cutler complained to the Japanese regarding the exclusion of vehicles produced by General Motors, Ford and Chrysler from qualifying for the Eco-Friendly Vehicle Purchase Program. Japan responded that the Detroit automakers would need to obtain "type certificates" from the Ministry of Land, Infrastructure and Transport (MLIT) for their autos to be exported to Japan to qualify for the eco-friendly program. The type certificate allows MLIT to analyze fuel consumption performances for verification. GM, Ford and Chrysler cars are imported to Japan without type certificates under a Small Volume Exemption (SVE), which was initiated in the 1990s in order to ease then U.S.-Japan trade tensions.
While the Japanese cash for clunkers program is set to end on March 31, 2010, there is strong consideration for an extension. Rep. Sutton's resolution calls on the Secretary of State to take immediate diplomatic actions "to ensure that any extension by the Japanese government of the Eco-friendly vehicle program is fair and not discriminatory in regard to U.S.-manufactured automobile imports to Japan."